Connect Chapter 7 - Videos with Questions
Emery has a $1,750 loan that will be paid off in one payment at the end of the year. The stated interest rate on her loan is 8.5%. What is Emery's simple interest on the loan?
$148.75
Lee has a $2,000 loan that is to be repaid in two payments, one in the middle of the year, and one at the end of the year. The stated interest rate on his loan is 9.5%. What is the total amount that he will have to pay on the loan?
$2,142.50
Debbie has a $400 loan and makes 12 monthly payments during the year. The stated interest rate for her loan is 9%. What is Debbie's annual percentage rate (APR)?
16.61%
Andy borrows $350 and makes one payment at the end of one year. The stated interest rate for his loan is 7 percent. What is Andy's annual percentage rate (APR)?
7%
Ronnie purchases furniture for $5,000 by using his credit card. The credit card company charges 19.5% interest and indicates that you must make a minimum payment of 3%. Norma purchases furniture for $5,000 by using her credit card. The credit card company charges 19.5% interest and indicates that you must make a minimum payment of 5%. Which of the following statements is true?
Because Norma's minimum payment is larger, the time required to pay off her credit purchase will be lower than the time required to pay off Ronnie's credit purchase.
Due to the ________, credit card companies are now required to show you how much time it will take to pay off your credit card debt if you make the minimum payment amount and the total interest you will pay by only paying the minimum payment.
Credit Card Accountability Responsibility and Disclosure Act.
Under this method, as the balance you owe ________ after each payment, the interest due will ________
Decreases; Decrease.
If consumers pay only the minimum payment required each month, then they will pay ________ total interest charges before their debt is repaid.
Higher.
As the number of payments during the year ________, the APR ________ compared to a lump sum loan.
Increases; Increases.
According to the end of the video, the declining balance method requires that you make ________ payments to pay off a loan and the amount of interest you pay will be ________.
More; Lower
According to the video, simple interest is defined as the interest computed on the ________ amount only and without ________.
Original principal; Compounding.
According to the video, which of the following are factors that determine a simple interest calculation? Select the most inclusive answer.
The amount of time for which the principal is borrowed, and the amount borrowed or principal amount.
